Netflix’s VPN clampdown didn’t hurt it

The conclusion that Netflix’s poor subscriber growth at the start of the year was a result of its crackdown on VPN users appears to have been put to rest.

Looking at the recent quarter, without letting up on its blocking of VPN users, Netflix posted good results.

Netflix CEO Reed Hastings said that after comparing their performance over a longer period, he believes even they have been “over-interpreting” their quarterly results.

Netflix recently disagreed with the assessment that its stricter policing of VPN users had affected its results, saying its lower-than-expected growth was because it phased out the cheaper price points early subscribers enjoyed.

Hastings said that only “a very small but quite vocal minority” were affected by the VPN crackdown.

With the benefit of hindsight, Hastings suggested there is a bigger picture than “ungrandfathering” old price points, new original content, or blocking VPNs.

“If you look at the whole year, we’ve generated 12 million [net additions] this year, last year we generated 12 million net adds. So there’s been remarkable steadiness measured over the three quarter period,” said Hastings.

He said there’s no denying that when Netflix has some big original programming, it helps grow the business – but much of the growth is linked to a fundamental underlying growth in Internet TV.

“We’re fundamentally in this growth cycle that’s to do with the Internet, smart TV, people getting used to on-demand, all of those aspects,” said Hastings.

Although constantly improving content is important, Hastings said he wouldn’t hook Netflix’s overall performance to quarterly “microvariables” like customer churn or the launch of specific shows.

“It’s much more of a deep force that’s changing the market as more and more people are getting used to Internet television.”

“Think of it as [what] can affect the quarter a lot, affects the year only a little.”

Now read: No Netflix price increase in South Africa anytime soon

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Netflix’s VPN clampdown didn’t hurt it